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Fair, intuitive and transparent pricing

How we work out your health insurance renewal premium

Applies to plans with a start or renewal date on or after 5th January 2017

Fair, intuitive and transparent pricing

We have a unique approach to calculating your renewal premium, based on:

1. Your age and base medical inflation
2. Your claims history
3. Your Vitality status

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How age and base medical inflation affect your premium
Your age has a direct effect on your premium – generally, the older you are, the higher the premium. This is because, as a population, we tend to make greater use of healthcare the older we become.

Base medical inflation – what hospitals and other providers charge for their services, including the cost of advances in medical technology and drugs – affects premiums, too. 

How claims  affect your premium
We also look at the amount paid out in claims over the preceding plan year for everyone on your plan. The lower your total claims, the lower the increase.

How Vitality status affects your premium
With us, you earn Vitality points for doing healthy things, like having a yearly health check and tracking your daily activity – walking, running, cycling, swimming or going to the gym. 

The more points you earn, the higher your Vitality status, the bigger the rewards and the lower your premium can be. Here’s how many points you need for each status:

Vitality points and status

Frequently asked questions

Here are a few of the questions we’ve answered for our members

Why are you changing the way you calculate renewal premiums?

We believe individual renewal premiums should be fair, intuitive and transparent. However, the no-claims discount approach to renewal pricing can act as penalty for those who claim, rather than a reward for those who don’t claim.

For example, a member makes one small claim, and their no-claims discount drops from 65% to 55%. Although the drop in the discount is only 10%, their premium goes up by almost 30%. Once age increases and medical inflation have been applied, the increase could be over 40%. Also, the traditional no-claims discount doesn’t take size of the claim into account. This means the member could see the same increase in their premium whether the claim was for £300 or £3,000. 

So we are introducing an alternative method for calculating renewal premiums, based on age, base medical inflation, claims and Vitality status. We believe this means our renewal premiums are fairer, more intuitive and transparent.

How are your renewal premiums unique?

We use the same factors as other health insurers when setting renewal premiums – age, medical inflation and claims made during the plan year. But, unlike other insurers, with us you can control a part of your premium by tracking your activity and increasing your Vitality status.

Your premium goes up each year based on your age and medical inflation. If you claim, instead of losing your no-claims discount and facing a big jump in premiums, there’s a smaller rise based on your age, medical inflation and claim size. However, you can limit the increase by tracking your activity and increasing your Vitality status.  

If you don’t claim, your premium only rises in line with age and medical inflation. Plus, you can still reduce the increase by tracking your activity and improving your Vitality status.

When will you calculate my renewal premium?

We’ll work it out two months before your plan is due to renew. The Vitality status we use is the one you have at the end of your tenth month of cover in each plan year, which could be the status you’ve carried over from the previous plan year. In your first plan year, we’ll calculate the total amount we’ve paid in claims for you (and any insured dependants) during your first ten months of cover. In each plan year after that, we’ll calculate the total we’ve paid in claims for you (and any insured dependants) for the last two months of the previous plan year, as well as the first ten months of the current plan year.

Do all claims affect renewal premiums or are some excluded?

Any claims paid under these plan benefits won’t affect your renewal premium:

  • Primary Care Benefit, including consultations with a Vitality GP or private GP on our provider panel
  • Prescription charges or minor diagnostic tests ordered by a Vitality GP or private GP on our provider panel
  • NHS Hospital Cash Benefit
  • Childbirth Cash Benefit
  • Dental Cover (if you have this benefit)
  • Worldwide Travel Cover (if you have this benefit)

Will I keep my no-claims discount if I switch to Vitality from another insurer?

You may still get an equivalent discount when you join us. You’ll need to send us your renewal quote and certificate of insurance. Then we’ll look at how many relevant claims you’ve made, and how long you’ve been insured.

How much will medical inflation be each year?

We can’t accurately predict in advance what medical inflation will be, but we’ll include details in the renewal documents we send you each year, eight weeks before your plan is due to renew.

Is medical inflation the same for all health insurance plans?

Medical inflation may vary for different types of treatment and in different areas of the country. Depending on factors such as where you live and your level of cover, there may be some small variations in the level of medical inflation we apply at renewal.

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